Scaling up Novihum Report Summary

Periodic Reporting for period 1 - Scaling up Novihum (A Sustainable Soil Solution: Scaling up Novihum, an innovation to convert bad soil into better, make brown coal clean and barren land green, and profitably advance food security in Europe and beyond)

Reporting period:
2015-12-01 to
2016-11-30

Summary of the context and overall objectives of the project

Soil is a vital – though often neglected – tool for increasing the resilience and security of food production, as recognized by the UN’s declaration of 2015 as the International Year of Soils; improving it can reduce erosion and enhance drought tolerance, crop yields, water and nutrient efficiency, and long-term land fertility.

Novihum is a uniquely scalable innovative soil conditioning technology that replaces natural humus in degraded and arid soils, significantly increasing crop yields while reducing water use and pollution. It is produced by enriching abundant lignite (brown coal) in a highly efficient industrial process, and is affordable, easy to use, long-lasting (>10 years), and good for the environment. Its unique set of properties make it novel to the market and highly competitive with all other soil conditioners, which are typically difficult to use, transport, or scale up. Novihum Technologies GmbH (NHT) was founded in 2012 to commercialize the patented technology, and has attracted venture capital investment from the EU and US.

Novihum is thus poised to play a major role in enhancing the resilience of the European and global agricultural sectors to climate and resource challenges. The business opportunity is enhanced because Novihum provides a unique opportunity for coal-rich regions struggling under CO2 emission restrictions to repurpose their lignite assets away from CO2-intensive energy generation into sustainable soil technologies, mitigating climate change while significantly enhancing the productivity, efficiency, and ultimate security of food production.

The objective of the Project is to scale up the Novihum production technology from prototype to a Pilot Facility in Germany. It will also demonstrate Novihum’s high-value impacts to potential customers and expand the product line. It will result in the know-how and proof of performance necessary to scale up to industrial production, and to a successful market entry and global expansion that will bring Novihum to the markets and regions that need it most.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

Since the inception of the Project in December 2015, major steps have been taken to take Novihum from lab to market.

Most importantly, in October 2016 NHT’s 1000 tonne/annum capacity Pilot Production Facility in Dortmund, Germany entered fulltime operations. It was officially opened on October 27th in the presence of regional government officials and eminent scientists, in an event that attracted coverage from the German media and trade press. It is now successfully producing more than 80 tonnes of Novihum per month, while serving as a platform for ongoing optimization of the production technology and the development of new product extensions. This critical milestone has proven that Novihum can be produced at industrial scale efficiently and reliably to the highest quality standards, confirming that its production can be scaled up rapidly to serve global markets.

In tandem with the start up of the Pilot Production Facility, in 2016 the sales and marketing team realized the first commercial sales of Novihum and opened sales channels for the product in multiple countries and regions, including Germany, Spain, and the Middle East.

In addition, trials providing independent proof of Novihum’s impacts for a range of high-value applications are underway in Europe, the Middle East, and North America in cooperation with world-leading scientists and research institutes, including the Institute for Post-Mining Landscapes (FIB) in Germany and Texas A&M in the United States. These trials are already providing compelling independent evidence that Novihum is more like natural soil humus than any competitor, offers short payback periods, and uniquely combines the characteristics needed to improve soils at scales from front yard to farm.

Strategic market replication activities are building on the market traction generated by these early successes to bring Novihum from beachhead to mainstream markets around the world. Partnerships and cooperative trials with key thought- and market leaders in the rooftop greening, horticulture, agriculture, recultivation, and landscape sectors are underway in Europe and North America, with potential to open country- and continent- scale markets to Novihum in the next 1-2 years.

Building on these technical and market successes, interest from key strategic and financial investors has been established to lay foundations for the future growth of NHT. High-level government stakeholders in Germany, the U.S., and Australia have also been intrigued by Novihum’s ability to increase agricultural resilience, sequester CO2, and stimulate economic development in coal-dependent regions. NHT’s work through this Project has attracted international acclaim, when it won the 2016 European Enterprise Network “New Directions” Award.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

Sustainably improving soil on large scales is very challenging; only a few candidate technologies are under development, and many face sustainability challenges of their own. None has yet been brought to market at a commercial scale.

There is thus a market-driven need for products to improve soil health which can be expected to grow significantly over the coming years as food demand and climate pressures concurrently increase. Rising awareness of the environmental damage wrought by inefficient agricultural practices – for example, the contamination of water resources by the runoff of excess nutrients – will further drive demand for technologies that increase efficiencies and reduce waste.

This Project began with the hypothesis that Novihum provides a uniquely scalable solution to these challenges. The results from the Project’s first year strongly support this hypothesis, demonstrating Novihum to be an innovative solution that moves beyond the state of the art because it:• supplies a replacement for permanent soil humus that more closely resembles natural humus than any other soil conditioner in the market;• can be produced efficiently at industrial scale reliably to the highest quality standards, confirming that its production can be scaled up rapidly to serve global markets;• is produced by chemically enriching lignite, an abundant natural resource that is a globally available commodity, such that it can be manufactured at very large commercial scales in many regions; • offers significant economic and operational benefits to its users, such that is has already won commercial traction in key beachhead markets.

The potential socioeconomic impact of Novihum is very large, with more than 3.5 million km2 of land in need of its benefits, and anticipated global annual sales of up to EUR 360 million in the agriculture, horticulture, recultivation, urban farming, and landscape sectors in the EU, US, and Middle East. Once scaled up, it can also offer a new, environmentally-friendly future for lignite and the regions that are economically dependent on it. Longer term, Novihum has the potential to help combat desertification while increasing economic opportunity, resilience, and food security in emerging and developing regions.

The results of this Project thus far have confirmed that Novihum is poised to realize this potential and play a major role in enhancing the resilience of the European and global agricultural sectors to climate and resource challenges, while driving growth and job creation in multiple business sectors and countries in Europe and beyond.